Credit: Quinn Dombrowski/CC BY-SA 2.0

The government’s memorandum of understanding with Amazon Web Services – under which contracts worth more than £ 300million have already been awarded – offers public sector customers a ‘base discount’ of 18% on the provider’s hosting services, PublicTechnology can reveal.

In addition to this savings, which is available to all public sector organizations that award three-year contracts to the cloud company, an additional 2% price reduction is available when services are prepaid and in. totality. A partial down payment of at least 50% gives the buyer an additional 1% discount.

Citing commercial sensitivity, the Crown Commercial Service and AWS did not disclose the terms of the MoU, known as the One Government Value Agreement. Asked earlier this month, neither would give a percentage of the savings available, although CCS said it “expects business benefits well in excess of £ 50million over the three coming years”.

The terms of the deal – which include a nondisclosure clause that applies to both parties – were revealed in unredacted documents, seen by PublicTechnology.

The MoU also states that, for AWS professional service offerings, a 15% discount will be applied to each qualifying engagement – or “ statement of work, ” in the vendor’s parlance.

Three years
Duration of the agreement

18%
Basic AWS hosting discount offered by OGVA

£ 313.14m
Value of OGVA transactions so far in eight contracts with central government entities

£ 1.2m
Amount of expenditure recorded to date for the six other agreements of this type

Based on standard office hours, the daily rates quoted for AWS Professional Services Consultants available for hire through the G-Cloud framework range from £ 1,048 to £ 2,313, depending on seniority. Evening and Saturday work is billed at time and a half, Saturday evenings and Sundays are double-shifted, while Sunday evenings and night shifts throughout the week cost 2.5 and three times as much respectively than normal.

The MoU further adds that the savings it offers on hosting and consulting cannot be added or combined with those offered through other AWS discount programs, such as the UK Government Deployment Program. supplier or its UK volume engagement program.

CCS and AWS both declined to comment for this story.

Cloud contest
OGVA is one of seven similar agreements signed with major cloud providers over the past year. These agreements are designed to provide discounts and other benefits to public sector bodies, as the suppliers in question effectively treat the market as one customer.

In addition to the 18-20% savings over three years, the OGVA contains a commitment from AWS to create a ‘digital skills fund’, which will be used to support the delivery of cloud training programs. computing to 6,000 officials.

In the six months since its introduction, a number of important agreements have been signed under the terms of the agreement.

These include new 36-month contracts with the Home Office (worth £ 120million), Foreign, Commonwealth and Development Office (£ 2million), the Department for Work and Pensions (£ 57million), HM Revenue and Customs (£ 94million), HM Land Registry (£ 4.5million), Driving and Vehicle Licensing Agency (£ 6.74million), the Department of Justice (£ 23.9million) and Companies House (£ 5million).

The cumulative value of these transactions is £ 313.14 million.

Assuming an 18% reduction across the board, the total cost of these contracts would be £ 381.9million, meaning cumulative savings so far of £ 68.7million. Although some level of discount was probably available to most public sector customers before OGVA.

But the potential for much greater savings under the new agreement is certainly demonstrated by the fact that many of the recent ministerial agreements have replaced existing ones with months or years to go; The HMRC deal replaced a contact signed with AWS as recently as September 2020 – two months before the MoU was put in place.

Along with the OGVA, memoranda were also signed with IBM, Microsoft, Oracle, Google, HPE and UKCloud. These arrangements collectively represent the results of a CSC work program dubbed the One Government Cloud Strategy.

But unlike the deluge of deals that followed following the AWS deal, the other six public sector savings vehicles have been little used so far.

A search of public procurement records reveals that the only identifiable example of a contract awarded under any of the other MOUs is a one-year £ 1.2million contract awarded to Oracle by the NHS Business Services Authority.

Six of the seven companies that have signed MoUs are also on the new £ 750million Cloud Compute framework. The procurement vehicle, which does not include HPE, is designed to provide another way for public sector buyers to purchase capacity for complex or high-volume cloud needs. UK players Fordway, Frontier Technology and UKFast are also included in the frame, which is designed to sit alongside G-Cloud.

“CCS is launching Cloud Compute to complement G-Cloud, which has shorter call times and a larger pool of vendors capable of offering more diverse services,” CCS said this week. “Cloud Compute focuses on flexible hyperscale compute environments, used for the development of new software applications or in which large and complex data sets need to be modeled, for example. Being able to quickly scale up or down the service offered is crucial and unavailable through G-Cloud. “